WASHINGTON - The Justice Department has decided to join a whistleblower lawsuit against disgraced cyclist Lance Armstrong, a lawyer for Armstrong, Robert Luskin, said Friday.
The move, which could happen as early as Friday, increases the odds Armstrong may have to forfeit tens of millions of dollars paid out by team sponsor, the U.S. Postal Service.
The lawsuit, filed in 2010 by former teammate Floyd Landis on behalf of the Postal Service, alleges Armstrong defrauded the government by using taxpayer dollars to buy performance enhancing drugs used to win seven Tour de France titles between 1999 and 2005. Armstrong has admitted to doping and that he bullied his teammates into using banned substances as well.
Until now, his admission has not resulted in serious financial consequences. He is estimated to be worth $125 million.
The Landis lawsuit, filed under the federal False Claims Act, poses a bigger threat to Armstrong's wealth because it triples financial damages. The case has been kept under seal while the Justice Department decided whether to join it.
The government is choosing to intervene in the lawsuit after settlement negotiations with Armstrong stalled over the extent of damages the postal service suffered as a result of the alleged fraud, an Armstrong spokesman said.
Armstrong's camp has argued that the postal service sustained little or no damage because it got a 300 percent return for its sponsorship of the pro cycling team. The postal service spent at least $31 million over four years to support the team.
"Lance and his representatives worked constructively over these last weeks with federal lawyers to resolve this case fairly, but those talks failed because we disagree about whether the Postal Service was damaged," according to a statement issued by his spokesman, Mark Fabiani. "The Postal Service's own studies show that the it reaped big rewards from its sponsorship -- with benefits totaling more than $100 million."
The United States Anti-Doping Agency (USADA) had lobbied the Justice Department to join the lawsuit.
USADA officials had been in separate negotiations with Armstrong to get him to reveal more details of doping in the sport in exchange for a possible reduction in the length of time he is banned from competition. The agency has already banned him from the sport for life and stripped him of his Tour de France titles.
But on Wednesday, Armstrong refused for a second time to testify under oath before the USADA.
After denying doping accusations for years, Armstrong in January admitted to using performance enhancing drugs in a televised two-part interview with Oprah Winfrey.
In that interview, Armstrong said he and his teammates could not have won the Tour without relying on a mix of EPO, transfusions, human growth hormone and testosterone.
He told Winfrey that at the time he didn't see it as cheating because doping was so widespread in cycling.
"I viewed it as a level playing field," he said.